TCH and FSTC Launch a M-Payment Initiative

The Clearing House Payments Company and the Financial Services Technology Consortium announced a joint initiative to identify ways banks, mobile operators and handset manufacturers can work together to facilitate the use of mobile devices for making payments. The initiative will focus specifically on two areas: 1) Mobile proximity payments, which are payments made at attended or unattended point-of-sale terminals using near field communications (NFC) or other contactless technologies, and 2) Mobile person-to-person (P2P) payments, which involve the movement of funds from one individual/account to another. Members of The Clearing House participating in the initiative so far include LaSalle Bank, BB&T, BofA, Citi, Chase, Comerica, HSBC, KeyBank, National City, PNC, U.S. Bank, Wachovia, and Wells Fargo.

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First Data Names a New General Counsel

First Data has officially named David Money as EVP/General Counsel and Secretary of the company to replace Michael Whealy, who is retiring following an automobile accident. Money filled a series of increasingly responsible positions in the legal departments of First Data and its predecessors. For eight years prior to joining First Data, Money was a partner in the law firm of Jones, Waldo, Holbrook and McDonough in Salt Lake City. Money was awarded his Juris Doctor degree from the University of Utah.

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Lloyds TSB Launches First Alerts to Fight Fraud

Lloyds TSB bank will introduce automated telephone alerts, called “First
Alert”, for their debit card customers. The service has been available
to credit card customers since 2005 and, due to effectiveness, is now
being extended to debit card customers. “First Alert” is designed to
work alongside Lloyds TSB’s fraud detection systems and automatically
calling to warn customers of suspicious transactions on their current
accounts. The introduction of this program for debit cards comes at a
time when cases of counterfeit fraud are on the rise. Fraud using cloned
cards have risen by 3%, while card not present fraud, where cards are
used over the phone, Internet or mail order, have increased 16%.

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CMB & JCB to Offer Co-Branded Hello Kitty Cards

JCB signed agreements with China Merchants Bank for the new
co-branded “JCB CMB Hello Kitty Fan’s” credit card. This card issuing
alliance with CMB, whom currently has more than 10 million cards issued
in China, is JCB’s fourth in the region. Rapid growth in the Chinese
credit card market has made the country one of the most important
markets for JCB issuing. Members of the “Hello Kitty Fan’s” credit card
can earn reward points to exchange for selected Hello Kitty items,
receive a 50% discount for monthly selection of Hello Kitty products,
and enjoy a special website exclusively for cardmembers on the CMB
website. The card also offers International acceptance and dual currency
settlement.

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CARD FRAUD

Card fraud among British credit card issuers dropped nearly 3% last year following a 13% decline in 2005, largely due to the migration to the “chip & PIN” program. However, “card-not-present” fraud continues to be the biggest fraud category, growing 16%, but down from the prior year’s 21% gain. According to APACS, the UK payments association, total card fraud losses hit GBP 428.0 million in 2006, compared to GBP 439.4 million for 2004, and the peak of GBP 504.8 million in 2004. APACS notes that losses as a percentage of plastic card turnover equated to 0.095% in 2006 – significantly less than the 0.141% figure in 2004. “CNP” fraud rose to GBP 212.6 million last year compared to GBP 183.2 million for 2005. The rate of increase for “CNP” fraud has fallen for the second time since 2003 in part due to the increased use by retailers of checks on cardholder addresses and the three extra digits on the signature strip and online initiatives like “Verified by VISA” and “MasterCard SecureCode.” APACS also says that the introduction of “chip and PIN” has made it more difficult for fraudsters to commit card fraud in the UK, with losses at UK retailers falling by GBP 146.7 million over the past two years. However, criminals are still targeting UK cards with the aim of copying the magnetic stripe data. They use this data to create counterfeit magnetic stripe cards that can potentially be used in countries that haven’t upgraded to “chip and PIN.” This has caused a 43% increase in fraud abroad losses over the last 12 months.

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Level-4 Advise ATM Operators On Software Upgrade

Level Four’s business-development director,Martin MacMillan, advises
ATM operators to exercise caution in overhauling systems to Microsoft’s
“Vista” software. What Macmillan promotes is testing solutions that
“exhaustively check” ATM applications or operating system changes that
are made. Given the early stage in the operating system’s lifecycle, he
also urges a “wait-and-see” policy for operators to see Vista proven in
the self-service field.

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VersaPay & Chase Paymentech Card Processing Agreement

VersaPay has signed an agreement with Chase Paymentech to offer
businesses a single source selection in processing card transactions.
Chase Paymentech’s powerful payments technology will allow VersaPay to
provide Canadian merchants a full spectrum of payment acceptance,
enhancing its B2B payment platform. Businesses will now be able to
accept a range of credit cards, including “FlexCache”, Chase
Paymentech’s customizable stored value/gift card program. Chase
Paymentech Solutions, merchant acquirer for businesses accepting
payments, has a customer base including more than 600,000 merchants
nearly 1 million locations around the world.

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WestLB And ClickandBuy Launch SEPA Pilot Project

Two companies, WestLB AG and ClickandBuy, have launched a project to
ease the pending application of SEPA. SEPA serves a market comprising
over 61 billion transactions across Europe. The joint effort between
WestLB and ClickandBuy will simplify these transactions early in the
developmental stages of SEPA by introducing the new payment formats and
significantly reducing the administrative costs to companies. SEPA is
vital to the implementation of a single market in the European Union
(EU) and will offer many cost advantages as a simplified payments
procedure.

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Clear2Pay Launches Unified SEPA Debit/Credit Solution

Clear2Pay has announced that a solution combining SEPA Direct Debits and
SEPA Credit Transfers is now available. Clear2Pay develops solutions for
secure, streamlined payment processing. The company’s new solution uses
Open Payments Framework (OPF), a library of component building blocks
built entirely on a Service Oriented Architecture (SOA). This allows
banks to deploy the combined solution or the components, SDD or SCT,
separately and independently. This flexibility offers banks the ability
to adopt SEPA at a pace that meets their requirements.

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Sony FeliCA Chips Reach 200MM Units Shipped

Sony’s “FeliCA” chips have reached a milestone. Officially, 200 million
of the integrated contactless payment chips have been distributed. Since
the first shipment of the product in 1996, 160 million have been used
in payment cards, including “Suica” and “EDY”, and 40 million have been
distributed for use in mobile phones. The past 18 months, however, is
when demand of these chips grew rapidly. In the past year and a half,
Sony has distributed 1 million “FeliCA” chips thanks mostly to the
popularity of Osaifu-Keitai mobile phones that use contactless payment
technology. Also contributing to demand is the use of “FeliCA” in
payment for public transportation, electronic money, credit
transactions, employee ID, membership cards and point cards.

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First Data & China UnionPay Launch Joint Venture

China UnionPay account holders will now have access to their
accounts outside China. First Data International payment services and
CUP have announced a joint venture to be used on First Data’s Australian
ATM network, “CashCard”. The venture will allow Chinese visitors access
to their accounts, transaction routing and payment processing services
in Australia. Across the country, CUP account holders now have access to
more than 5,800 ATMs. This initiative is the first step in allowing CUP
customers access to ATMs worldwide. First Data is a payment services
provider that has approximately 7,900 employees and operates worldwide.
Currently, 189 member institutions have issued CUP cards and 520,000
merchants can accept CUP cards.

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Accor Services Acquires Kadeos Prepaid Cards

Accor Services will now lead the gift card and voucher market in France.
The company has announced the acquisition of Kadéos, a smaller gift card
and voucher business, for 210 million euros. Kadéos cards and vouchers
are sold in over 6,500 outlets and can be used in nearly 1,000 stores
and websites in France. The acquisition will enable Accor Services to
provide the market’s broadest offering of media and an extensive network
of affiliates. Kadéos reported 2006 issued volume of 336 million euros
in Europe. Thanks to the new development, however, volume is expected to
be around 2 billion euros in 2007 and sales are expected to increase by
10% to 15% a year in the corporate and works council segment and by 20%
to 25% in the retail segment.

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